Delta Electricity to extend life of Vales Point coal-fired power station

Trevor St Baker, the coal baron who is trying to buy AGL Energy's Liddell power station and Engie Group's Loy Yang B, is planning to extend the life of Delta Electricity's Vales Point coal-fired power station beyond its estimated closure date in the early 2030s.

"There is no such thing as a 50-year economic life for a coal plant," Mr St Baker said in an interview with The Australian Financial Review.

Coal baron Trevor St Baker wants a level playing field for coal investment. Robert Shakespeare

"We believe Vales Point is going to last a lot longer than 2029 when it reaches its 50-year age. We are investing in life extension with a capability beyond 2029. We'll wait and see what happens progressively by then but the technology is capable of extending and while ever the fuel is there we will extend its life."

Mr St Baker said they were paying big prices against international customers and recently secured 300,000 tonnes to help the company get through.

"We are scrambling around for more coal and competing with the export price trying to make up part of the generation Hazelwood was supplying NSW previously. But it's expensive and there isn't a lot around," he said.

Mr St Baker said it was a more sensible option to extend the life of existing coal-fired generators rather than build new ones from scratch, with price estimates for high-efficiency, low-emissions plants varying from $2 billion to $5 billion.

"The country can't afford not, as a national requirement, to get the maximum life out of existing power stations because the new investments have to be rolled into the overall price of the power the market has to recoup," he said.

Mr St Baker – who has been one of the strongest advocates for keeping fossil fuels in Australia's energy mix – said there needed to be a level playing field for companies trying to secure finance for coal projects in Australia.

"Two-thirds of all power generated goes to business. You can do lots of things with roof-top solar and things like that, but the industry of Australia needs to keep its base load power and coal is our only source," he said.

"The only reason there is no coal-fired power station being built is because no Australian bank is going to be on the front page of the paper lending to coal. We have to go overseas for lending for our Loy Yang bid. It's ridiculous."

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Delta Electricity is in the running to buy Loy Yang B along with Alinta Energy and its owner Chow Tai Fook. Alinta Energy closed its Playford and Northern Power Station in South Australia last year, which added to the state's power woes last summer.

In its submission to the Finkel Review, Delta Electricity said the closure of coal-fired power stations in SA and Victoria had eroded system security and pushed prices up.

"I think working out a level that base load generation in a portfolio – even from La Trobe Valley – can meet would be a way to actually to have some signal [in the market] rather than no signal," he said.

"We're not adverse to some bipartisan number and I think 0.8 would be a number which would work as long as there is a level playing field for finance. We need to counteract the intimidation of Australian banks and to have policy certainty."

Federal Energy Minister Josh Frydenberg, who has continued to attempt to wedge Labor on its support to close coal-fired power stations, said the Turnbull government had been doing all it can to put downward pressure on power bills including forcing retailers to make customers aware of discount offers and putting in place tough new controls on export gas.

"Only the Coalition can be trusted to deliver a more affordable, reliable power system," he said.